PWIB123 wrote: palinc2000 - If Lafond or Marsolais have options expiring, they will exercise them, but that doesn't mean they have to sell them or sell them all. Lafond has proven he's a short-term thinker and likely not in a financial position to pay up the small amount to hold the shares or at least he wasn't back in July, but there are other options available outside of simply liquidating all the shares.
1. They could take out a stock secured loan (not a margin loan) and borrower money from a bank for investment purposes (including paying the taxes) using the stock owned in their brokerage accounts as collateral. Typically this is done with something like a 60-75% advance rate and a document called a control agreement.
2. They could exercise all of the options and only sell a small amount of stock to cover whatever tax burden is created. In the U.S. on Form 4, sometimes companies will write in a statement that essentially says "forfeiting shares to cover tax associated with stock compensation plan." This at least informs the market and communicates a desire to hold as many shares as possible.
3. I once saw a director write a public letter and issued as a press release explaining why he was selling shares in the company. I've only seen this once in my lifetime, but it was very clear about the directors larger tax situation as he owned multiple companies and was in a position to need cash. I thought this was a step above board in terms of reassuring shareholders when put in a position that had nothing to do with the company's future prospects.
4. Obviously, they could just suck it up, pay the taxes and hold the shares in anticipation of a much, much larger return in the near future.
palinc2000 wrote: I dont think the timing of the exercise of the options has anything to do with taxes.
This is a low cost public relation move aimed at showing confidence .....
I suspect she might be acting pro actively to lessen the blow when other insiders exercise low price options and sell the newly acquired shares on the same day...
Maybe too much suspiscion on my part!!!
realitycheck4u wrote: Rusty,
There are a few moving parts here. If Dawn had conviction, she would exercise her other 82000 options too. Because then she only pays tax on option value and current price now which is key, and then pays no Cap gains until later when she sells. So sooner the better. If held in an RSP, TFSA, then there is no tax on the profits from the sale. But the stock option deduction is generally still available, as long as you owned the shares for at least two years before selling them after exercising them. So, if she exercises now, she needs to hold them for 2 years to get the 50% deduction. However it gets more complicated and many people do not know this.
For options granted after June 30 2021, options that can qualify for the 50% employee stock option deduction are limited to $200,000 annually (based on the value of the shares on the date the option was granted). The new rules do not apply to public employees (which she's not an 'employee') where company’s revenue is $500 million or less.
Paying tax on Cap Gains is taxed at only 50% what you would normally pay if this was employment income.
I think Directors should be considering these things and place their bets now. We also do not know if Dawn has/will sell, as she can take up to 10 days fto report it.
stockman75 wrote: So Dawn clearly could relate to the analogy of being "that girl". She is implying we have a good chance of getting a date and maybe a bit more.... but of course still playing a bit coy. LOL.